The Achilles heel of future economic growth : the workforce development challenge : what is it? how critical is it? who's doing what to address it?

Morrison Institute for Public Policy
School of Public Affairs # College of Public Programs
Arizona State University
The Achilles Heel of
Future Economic Growth:
The Workforce Development Challenge
What Is It?
How Critical Is It?
Who’s Doing What to Address It?
Prepared by
Mary Jo Waits
and
Judith A. Vandegrift
for
Greater Phoenix Economic Council
Fall 1998
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Introduction
Fierce competition for workers is one of the top issues today in Arizona. Many people may be
surprised to hear that anything related to the state’s economic situation is on a list of pressing
issues. Our economy is booming. The state is one of the country’s hottest job machines.
Unemployment is the lowest in two decades. Companies and people continue to move to
Arizona in record numbers. But now come signs of a new era; as Arizona’s economy is and
remains robust, the state is finding it difficult to supply workers in demand by industry.
< Newspapers carry up to 46 pages of help wanted ads with large sections devoted to health
care professionals, software engineers, and telemarketers.
< High technology companies such as Motorola and Intel report that they reject as many as
9 out of 10 job seekers for want of needed skills.
< Some companies have increased entry level wages by 50 percent to compete for
employees.
< Workforce problems are causing Arizona companies to decide not to expand locally and
some are even choosing to move elsewhere to find workers.
< Local firms are increasingly critical of economic development organizations for actively
courting and successfully recruiting new companies to the state which compete with them
for workers.
The results of the above factors is a new but deep threat to our economic future. Businesses’
inability to find and retain the workers they need, where they will need them, may in fact be
the spear that unexpectedly pierces the state’s prosperity.
Of course, Arizona does not stand alone. Wherever one goes in the United States, it is
impossible not to hear something about workforce development. From construction workers
to high-tech talent, there is a “squeeze.” One expert believes it is not hyperbole to say human
capital is “the next great American Deficit.”1
The fact that Arizona does not face this issue alone, however, does not lessen the importance
or urgency of addressing it. The workforce, its abilities and capabilities, is fast becoming the
most important competitive weapon in economic development. Many people share the
opinion that soon the key differentiator among states and cities may actually be who can
deliver the right people when and where industry needs them.
What is happening in Arizona’s economy is only beginning to dawn on most Arizonans. It is
hard to imagine that good news about the economy is bad news for workforce development.
Yet, the possibility of an “economic growth squeeze” and the need to address it soon have
never been more clear. This report is meant to provide both a basis for understanding the
2 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
scale and importance of the workforce development issue and a basis for shaping a response
vis-a-vis public policy, business practices and individual responsibility.
The need for such a document surfaced during the Greater Phoenix Economic Council’s
Economic Summit XII held April 21, 1998. The topic for discussion was the critical factors a
region needs to remain competitive in the global economy of the next century and how
Greater Phoenix ranks in those factors. The Summit’s 400 participants and panel of industry
experts not only reinforced the importance of workforce for competitive advantage but also
raised the need for a broader understanding of the issues, problems and solutions. GPEC, in
response, commissioned this report to serve as a starting point for productive dialogue and
concerted action. The report is not a labor forecast or tactical “how-to” guide on improving
the workforce in Arizona; these are the tasks of others. The intention of this report is to alert
all Arizonans that the workforce issue has a new urgency in the state, and that multiple
players have roles in addressing problems.
A Clear Message: Workforce is Critical
One newspaper reporter characterized the theme that emerged during GPEC’s Summit as
“Businesses are confronted with a dearth of skilled workers.”2 That message came in several
ways. Each of the speakers representing four of Arizona’s clusters—high technology,
bioindustry, software, environmental technology and food, fiber and natural products—
stressed the workforce challenge. Keynote speaker and futurist Rob McCord assured them that
their concern cuts across the entire county and that most thoughtful business leaders in
America now are justifiably alarmed about the availability of good, well-trained, well-motivated
and affordable people. The results of a survey conducted for the Summit bolstered
their observations. A quality workforce is the single most important factor for global
competitiveness, according to about 140 respondents to a one-page survey sent out with the
Summit invitations.
The survey asked key public, private, and non-profit leaders in the Greater Phoenix area to
rate nine factors in terms of importance for global competitiveness and to rank Greater
Phoenix on the same factors. The nine factors included: (1) workforce quality and quantity;
(2) accessibility to domestic and global markets; (3) taxes/regulatory environment; (4)
availability of capital; (5) real estate land and buildings; (6) technology R &D capacity and
university/industry technology transfer; (7) business incentives (tax and financial); (8)
public/private collaboration in addressing key community issues; and 9) pro-business
government leadership. Results of the surveys returned are presented graphically in Appendix
A and will be discussed throughout this report. Because of the small number of responses, the
survey cannot be considered “scientific,”nor can the results be considered “statistically
significant.” However, the responses do provide a snapshot of what business and community
leaders consider to be important in positioning businesses and the Greater Phoenix region
globally.
A second theme to emerge during the Summit was boldness and creativity. “Workforce
development is a large issue that demands a large solution,” said McCord. Indeed, one report,
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according to McCord, suggests the country will need efforts on the scale of a new moon shot
to close our skills gap. At a minimum, it is going to take a whole new perspective on the
economy and new workforce tactics to outgrow the problem and flourish. On McCord’s list of
solutions are “aggressive reform of training and educational programs” and “large amounts of
cooperation among companies and between business and government.” Individual companies
cannot adequately address human capital problems and therefore need to consider innovative
partnerships. Public-private organizations like GPEC can help catalyze that cooperation, says
McCord.
A Quick Overview of the Issue
One of the challenges to addressing the workforce problem is a common understanding of the
issue. Is the human capital problem one of supply or skills? Is it an issue only for high tech
companies? What is industry’s role in workforce development verses government’s role?
Although the issue is complex and each community has unique challenges, this is essentially
the story:
< The workforce deficit is about quantity and it is about quality.
< It is an immediate problem; it is also a long-term problem.
< It is a threat to business competitiveness; it is a threat to Arizona’s competitive
advantage.
< It has industry doing cartwheels to find solutions; it has government standing on its
head.
The following sections provide more details on each of these points. The report then
concludes with a discussion of what Arizona is doing to address the issue and what GPEC
might do.
The Workforce Challenge Is about More and Better Employees
Today it is not absurd to say we have more jobs than people to fill them. GPEC Summit
speaker Rob McCord characterizes the quantity aspect of the problem this way: “We have too
many jobs which are out people hunting.” The situation is increasingly well-documented.
< The U.S. Department of Commerce recently released a report about the “national
shortage” of information technology workers. Most recently, the Information Technology
Association of America surveyed mid- and large-sized U.S. companies (100 plus
employees) and found that there are more than 340,000 unfilled information technology
jobs in the U.S.3
4 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
< Other reports remind us that the deficit clearly stretches well beyond the high-technology
industry. In a survey released by the American Management Association in April 1997,
nearly half of 400 human resources executives polled from mid-size to large companies said
skilled workers were scarce.4 What’s more, the end is nowhere in sight. Two thirds of the
executives in mining, manufacturing, construction, and business and professional services
predicted that the situation would intensify in the next three years.
< In compiling its 1998 list of Arizona’s top 100 businesses, the Arizona Republic found a
recurring theme—many of these companies are having problems finding employees and
some are disappointed in the quality of the applicants they are seeing.5
< The non-scientific survey for the GPEC Economic Summit shows 80 percent of the
business and community leaders polled believe workforce quantity is a very important or
important factor for success. Sixty-nine percent of the same group rated the Greater
Phoenix area’s performance on the factor as average or below average. Less than one-third
said the supply of workers in the region is excellent or very good.
But the problem goes well beyond sheer raw numbers. Rather, it centers on the skills that
potential employees bring to the table—or personal computer or assembly line—as job
applicants. Many students exit school without the skill sets required by business. Many adults
need training to gain entry into the workforce. Again, the problem is well documented
nationally and locally.
< The National Manufacturing Institute recently released its findings that 40 percent of all
17-year-olds lack requisite math skills and 60 percent do not have the necessary reading
skills to hold down a production job in manufacturing.6 The same study reveals that 60
percent of American workers indicated that they needed some form of training to qualify
for their jobs. An additional 40 percent said they need to upgrade their skills once on the
job.
< The GPEC Summit survey clearly shows that workforce quality is an extremely important
issue. The wake-up call, however, is that 70 percent of the respondents rated the region’s
competitiveness as measured by the availability of quality workers as average or below
average.
< Another Arizona survey indicates that over 80 percent of employers statewide say they are
having a hard time filling jobs with competent, well-trained people. And, 87 percent feel
that high school graduates are not being prepared for the jobs available.7
Taken together, these examinations of companies’ human resource needs make it clear that
the central workforce issue is developing “more and better” employees. However, there is yet
another dimension to the issue—timing. Throw in this factor and the challenge becomes
even more complex. It is, then, to supply enough workers with the “right” skills to meet
employers’ needs in a timely fashion.
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Workers Are Needed Now, Tomorrow, Next Year, and Next Decade
Consider this story of the largest producer of semiconductor manufacturing systems in the
world, Applied Materials. This $3.1 billion Santa Clara, California firm is the archetypical
global company of the 1990s. It has enjoyed sales growth of nearly 40 percent a year for the
better part of the decade. That’s an enviable situation, to be sure. But these days, its growth
also presents more than a few headaches. For one thing, such growth means the company is
faced with the challenge of hiring approximately 300 new employees EVERY month.8 Every
unfilled job means thousands of dollars per year—or per week—in foregone profits. What’s
more, the end is nowhere in sight which means human resources managers have to make sure
there is a steady and ongoing supply of talent on a long-term basis.
The story is much the same in Arizona, although perhaps not as dramatic. Regardless of the
industry and the need—engineering, computer programing, telemarketing,
biotechnology—companies now are swamped with immediate recruitment and retention
problems. At the same time, they have to figure out what capabilities they need in the future
and put in place workforce delivery systems or pipelines to prevent an escalation of the
problem in the future.
In theory, the people delivery system is in place. Figure 1, although simplistic, depicts a
workforce “pipeline” insofar as there is a pool of potential employees to meet industry demands
in the immediate, short and long term future. It shows there is a pool of potential workers,
namely adults either in or able to enter the workforce, who presumably could meet industries’
immediate needs. In the short term, there is a supply of potential workers who will exit
community colleges or 4-year institutions with some postsecondary education and training.
And, there are K-12 students who are the workforce of the future.
Figure 1. Matching the Workforce Supply with Industry Demands
Workforce Supply Industry Demand
Un/underemployed
adults or adults
who need retraining
Immediate, or
short-term, needs
Community/4-year
college students
Intermediate needs
K-12 students Long term needs
6 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
In practice, however, the workforce pipeline in Arizona and elsewhere has serious glitches.
The glitches come from many areas, including demographics, business practices, education
policy, family situations and individual inertia.
< Shifting U.S. Demographics: As a result of the US birthrate, there are simply fewer people
entering the job market today. The bottom of the baby bust was 1975, meaning there is a
smaller pool of college graduates in the labor market now and going forward. At the same
time, the oldest baby boomers have already begun to retire and a larger wave will follow
over the next couple of decades. Arizona Public Service’s situation illustrates how a
company could be hit hard by the next wave: 83percent of the company’s workforce is
over the age of 40 and only 2 percent is under 30.9 There is evidence that many of these
“restless retirees”will stay in the workforce at least part-time. Still, unless the birthrate
changes or some other source of new workers emerges, the labor pool will continue to
shrink in the future.
< Business Practices: A relentless quest to downsize and cut costs in the late 1980s and
early 1990s led companies to layoff large numbers of workers. Next came re-engineering
when firms eliminated middle-management positions and production level workers and
decided instead to employ large numbers of temporary workers and “out-source” many
functions. In turn, this new reliance upon temporary workers and outsourcing led firms to
downplay in-house training and promotion plans. While these strategies had positive
results lowering costs, increasing profits, and providing more security for firms facing an
uncertain competitive environment, they stood certain nostrums, such as career ladders
and internal advancement, on their heads. For example, one result of “delayering” has
been less opportunity for entry level workers to move through company ranks, acquiring
new skills and experiences along the way, to fill job openings closer to the core workforce
of the employer. These business practices have, in effect, put glitches in companies
“internal” workforce pipelines.
< Public Policy: The most fundamental public policy impacting the supply of workers is, of
course, education. Unfortunately, nearly everyone agrees that many educational systems
are not preparing students for real jobs in today’s workforce. As Workforce magazine says,
“High schools and colleges are pumping out fewer and fewer students who have the skills
employers need. Many firms are having to train and re-train scores of workers—even
before formally hiring them—to ensure their people have the right skills for the jobs
available.”10
But this “layer” of the pipeline is also troubled by students’ unfamiliarity with various
industries, especially high tech. One high school student in Austin, Texas interviewed on
the News Hour with Jim Lehrer explains his reluctance, “no one in my family works in this
field, so I have no way of knowing really what they do…I don’t know if they’re actually
doing hard works, or brain busters or what.”11 Unfamiliarity, in turn, leads to concern
about being unsuccessful in the high tech field. On the same news show, a high school
teacher describes his challenges recruiting students to math and science classes: “When
we’re trying to recruit students for these hard classes, the first question they ask us: Is it
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required for graduation? You say, no. The second question they ask us: Is it hard? And we
say, yes. The third question is: Why should I take it?”
Interestingly, 40 percent to 60 percent of all science students graduating from the U.S.
universities are now foreign born.12 This fact has not gone unnoticed and more and more
high tech firms are now looking for foreign brain power to fill their top engineers and
scientists positions. Scores of other companies are looking outside U.S. borders for
workers. But this “pipeline” is constrained by U.S. immigration policies that limit the
number of employment visas. According to one report, “In 1997, the limit of 65,000 visas
for skilled foreign workers was realized in early September, the earliest in decades.”13
< Family and Individual Responsibility: The reality is that the first responsibility to achieve
employability and productivity goals rests with the family and the individual. Families are
the most significant influence on the values, behavior, and learning of children and
youth. There is ample evidence, for example, that parents who are uncaring, abusive, or
who place a low value on educational achievement are threats to both the health and
education achievement of our future workforce.14 Much of the health habits and life-styles
(e.g., drugs and criminal activity) that prevent or lengthen the odds against youth being
able to complete high-school or other preparatory training schedule adequate to permit
them to enter the labor force arise initially from the failure of parents (and others) to
identify, educate, and treat the problem. These and other strong adverse family influences
(e.g., split families and teenage mothers) mean that from a fifth to a quarter of the below-
18 population, including especially large populations of black and Hispanic youth, are
vulnerable to varying degrees to unemployability or to work lives that produce far less
than optimal results.15
Moreover, as President Clinton says, “What you earn depends on what you learn.” And
any individual who does not take responsibility for development of his or her skills and
education credentials is vulnerable to a lower standard of living and future
unemployability. The skills required for present and future jobs are in a constant state of
flux and employees that do not keep their skills up to date are a drain on the labor pool
and a negative impact on company productivity. Still, many workers do not fully
appreciate the economic value of retraining or “life-long learning” for themselves and are
not actively pursuing their options.
Workforce Is Key for Business Competitiveness and Regional
Competitive Advantage
American companies today must compete not just with their domestic neighbors but
with companies far away as well. What gives one company a competitive advantage
over another? It’s people and the knowledge they possess.16
This statement by Workforce editor Samuel Greengard has the clear ring of basic common
sense. It is people that create new technologies, new products, new jobs, and new industries.
It is people and knowledge that drive innovation. And in the business world, survival has
been reduced to a simple creed: innovate or perish.
8 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
“People and the knowledge they possess”are not an important source of competitiveness for
only high tech companies. That is a common misunderstanding that needs to be quickly
corrected. They are the key to economic success in a wide variety of products and services,
from agriculture and apparel, to business services, retail, and software. “Just-in-time
agriculture” in California is an example of the power of knowledge and innovation for more
than high tech. According to Collaborative Economics, a Silicon Valley based consulting
firm, “California has remained on the competitive edge of agriculture by applying new
technology, improved growing methods and irrigation and innovative product marketing. In
the Salinas Valley outside Monterey, California, vegetable growers work with processors to
harvest fresh lettuce, tomatoes, and other produce from the fields, lightly pack them in
vacuum packed wrapping, and shipping them to supermarkets to be sold as pre-made bagged
salads. Because of the convenience and fresh quality, consumers are willing to pay a premium
for this ‘just-in-time agriculture’.”17
If it is true that people and knowledge are the keys to competitiveness, then this is now a very
important issue for states. By implication, those states that organize knowledge—research and
development activities, specialized workforces, and unique business infrastructure—to support
industry innovation and worker competence are most likely to have a competitive advantage
in capturing new economy growth and quality jobs.
More states, including Arizona, are beginning to recognize these as the prerequisites of good
economic health. Prior to the 1990s, however, the accepted wisdom was that economic
health could be attained by merely reducing the costs of doing business in a state—cutting
taxes, resisting higher wages, weakening or limiting regulation, and subsidizing land costs,
among other measures. But if the global economy, unprecedented economic boom, and labor
squeeze have revealed one thing, it is that economic expansion and profits are not predicated
only on low costs. An educated and skilled workforce and technological innovation are the
engines that drive the growth machine.
This is clearly the view held by most of the business and community leaders attending GPEC’s
12th Economic Summit. As discussed earlier, Summit activities included a survey that asked
people to rate nine factors in terms of importance for business global competitiveness.
According to roughly 140 key business and community leaders in Greater Phoenix:
< Workforce quality is the most important factor for global competitiveness;
< Technology and R&D capacity rank second behind workforce quality;
< Pro-business government, access to both global and domestic markets, workforce quantity,
and availability of capital are also considered important factors in global competitiveness;
< Factors considered least important for global competitiveness are: business incentives, real
estate (both buildings and land), taxes/regulatory environment, and public/private
collaboration on key issues.
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Acknowledging the importance of these factors and actually making changes in public policy
and business practices to enhance them are two very different issues. The next section of this
report describes how businesses and states are addressing the workforce challenge.
Business Is Turning Cartwheels to Find Solutions
It should come as no surprise to anyone reading this report to this point that industry is taking
bold and creative steps—that is, “turning cartwheels”—to attract and retain workers today
and grow tomorrow’s workforce. The stakes are high, as the following examples of short and
long-term strategies from around the country convey.
< Bonuses—According to an April 23, 1997 US News & World Report cover story on the
workforce crisis, companies are using bonuses to entice everyone from software
programmers and MBAs to hamburger flippers and bicycle couriers.18 For example, one
manager of a Domino’s Pizza in Dallas offers $200 signing bonuses and health benefits to
attract delivery drivers. And according to the magazine, Ameritech, the
telecommunication company, gives up to $1,000 to employees who recommend
candidates who are subsequently hired. Arizona Public Service is so hard-pressed to find
information-technology workers that it is paying a $1,500 bonus to any current employee
who refers a qualified prospect that leads to a hiring.19
< Salary bidding wars—A common example: A Silicon Valley mechanical engineer laid off
by Genesis Technology in a downsizing move immediately found himself the focus of
company bidding wars that resulted in a new salary $12,000 over his old one. Many
companies are beefing up their profit-sharing and stock-purchase programs to entice
workers.20
< Raiding temporary agencies—The April 1998 issue of Workforce reports that more and
more companies are hiring directly from temporary help agencies—and paying fat
premiums to do so.21
< Recruiting abroad—High tech industry looking for engineers and scientists are taking
their search to other countries. Workforce Online reports: “Software producers like Oracle
and Sybase are employing programers from India. Semiconductor and hardware companies
such as Texas Instruments and Hewlett Packard are grabbing engineers from Taiwan and
Korea. And chemical companies and pharmaceuticals—from Eastman Chemicals and
Pfizer—are mining for chemists, biologists and physicists.”22
< Education/training incentives—To attract workers and keep them, more firms are paying
for community college, college and graduate degrees and even giving managers training
budgets. Boeing, for example, is attempting to boost hiring by providing paid-on-the-job
training. Applicants who meet certain criteria can receive three months’ paid training
and then decide whether they want to accept the job.23 With its “Lifelong Learning”
program, Boeing is providing existing workers unlimited tuition reimbursement for any
10 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
kind of education or training an employee desires. If an engineer decides to become a
medical doctor, Boeing will pay for the school. The thought is that by allowing employees
to engage in learning activities outside work, they will get more into the continuous work
mode at work as well.
< Melding training and technology—Companies that downsized, re-engineered, or merged
are turning to a technology-based approach to employee training as a means to keep costs
low and increase worker productivity. Lecturer courses are being replaced with distance
learning, interactive or linear video, computer-assisted programs and workbooks.24
< Training the unemployed and unskilled—Rather than engage in a bidding war for
assembly workers, Bell Helicopter decided to identify individuals collecting
unemployment insurance or who were in low paying, dead-end jobs and train them in
partnership with the community college. The company screened applicants, tested their
skills, designed special curriculum and set up new, nontraditional assembly teams to ensure
employee success. As a result, Bell reports a 78 percent drop in turnover and a 181
percent rise in productivity.25
< Apprenticeship programs—Tired of spending millions of dollars going East, recruiting and
moving people to work in Arizona, AlliedSignal recently established Workforce 2000, an
apprenticeship program to help meet its need for qualified machinists.26 Students recruited
from high schools and community colleges complete a four-year program combing
comprehensive shop theory and on-the-job training. Students completing the program
achieve certified journey status as well as a two-year Associate of Arts in Science degree.
< Industry “universities”—Some corporations start their own training universities. For
example, Motorola University, which has an annual budget of about $120 million, is a
corporate training and adult education facility designed to deliver a training curriculum to
Motorola’s more than 10,000 employees in the Phoenix region. Motorola University is
also partnering with ASU’s Colleges of Engineering and Business to offer a technology
MBA program.
< Partnering with local schools/community colleges—As a means to a workforce pipeline,
businesses are becoming partners with local schools to provide students and teachers with
hands-on experience in the world of work through school-to-work and related programs.
Similarly, businesses are working with education and training communities to develop
clear standards for what students and workers must know and be able to do to succeed in
the workplace and in their industries. In Greater Phoenix, for example, industry,
education, and economic development groups formed the Semiconductor
Industry/Education Partnership (SIEP) to increase the number of skilled technicians
available to the high-tech industry. Based on curriculum designed cooperatively with
high-tech industry and Maricopa Community Colleges, SIEP trains students in
semiconductor manufacturing, circuit design, and facilities maintenance. In Austin,
Texas, high tech firms are reaching out to the city’s teen-agers to develop into future
skilled workers.27 Their past efforts to recruit workers out-of-state did not pay off because
of the high costs of bringing them to the state and the rapid turn over once they got to
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Texas. Thus, the companies partnered with the city, chamber of commerce, community
colleges and high schools to introduce high school kids to high tech careers.
< “Cultivating a cool culture”—According to Workforce magazine, many companies find
paychecks and benefits are not enough to attract and retain the right employees and
therefore are working on becoming “cool places to work”—that is, different, non-traditional,
cutting edge.28 This means causal dress, virtual teams, domestic-partner
benefits, flexible schedules and onsite daycare.
< Partnering with other firms—The Arizona Optics Industry Association, a group of 145
firms located primarily in Pima county, put assistants in eight local schools to promote
careers in science and also developed specialized technician curricula for community
colleges. The San Francisco Hotels Partnership Project operates a joint training project for
the employees of major hotels in the San Francisco area. Employees identified the core
skills to be emphasized in the training and helped select the instructors. Since the program
began in 1994, participating hotels have reported increases in customer satisfaction
ratings.29
< Other novel approaches—National media are reporting that the competition for workers
has inspired some recruiters to try unusual approaches.30 For example: Intel sent out a
mailer to 14,000 engineers, offering a seven-day trip for two to Hawaii to all who join the
firm. IBM set up a recruiting tent near sunbathers in Daytona Beach, Florida during spring
break. Cisco Systems, a computer networking company hiring employees at the rate of
1,200 a quarter, links its on line recruitment site to the home page for Dilbert, the comic-strip
much loved in San Francisco.
Government Is Standing on its Head to Find Solutions
The role of federal and state governments is fundamental in workforce development. The big
players are, of course, the service providers, including K-12 schools, community colleges,
universities, and public job training programs, and the funders and administrators. At the
federal level, there are some 15 agencies administering 163 workforce development programs.
In Arizona, there are a minimum of five agencies administering 34 such programs. Combined,
these programs provide about $180 million annually to train and upgrade the state’s
workforce. Monies are administered by the Governor’s Office, Arizona Department of
Commerce, Arizona Department of Economic Security, Arizona Department of Education,
Arizona Industrial Commission. Recently added to the mix are welfare-to-work administrators
and programs.31
So how are states approaching the challenge of developing more and better employees? For
years, states tackled workforce development through a wide collection of independent, often
identical services to respond to the needs of citizens and businesses as each individual agency
or program defined those needs. Not surprisingly, this approach received a lot of criticisms for
being fragmented, uncoordinated, unresponsive to business needs, and generally ineffective.
In response to these criticisms, states, one-by-one, have begun crafting a new approach to
12 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
workforce development that departs dramatically from the past. Essentially, states are
concluding that to really be of service to businesses and different populations they need to be
able to offer easily accessible, customized responses to expressed business and citizen needs,
not just to trot out a catalog of training programs and school systems that may or may not suit.
Figure 2 illustrates the new direction for workforce development. It is too soon to claim that
states have successfully overhauled their workforce development systems. While a growing
number can boast a number of important reforms—and however encouraging their
successes—the overall impact of the initiatives developed by even the most innovative and
aggressive states fall short of achieving impact appropriate to the challenge.
Figure 2. New Direction for Workforce Development
Current System New System
# Employer as critical observer/advisor # Employer as fully vested partner
# Government as presumptive provider # Government as catalyst for action and
change among employers
# Government as broker of public/private
partnerships
# Compliance-driven # Accountability for results
# Centralized decision-making
# Placement oriented
# Decentralized decision-making
# Concerned with job retention and
advancement
# School and classroom based # Work-centered
# Targeted primarily at the unemployed
and disadvantaged
# Universal, including incumbent workers
# Focused on entry-level skills # Focused on transferable skills and
portable credentials
# Works primarily with single employers # Works with networks of employers
grouped around similar and
complementary sectors
Source: National Governors’ Association, 1998.
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Nevertheless, some promising, common components to state reform include:
New Teammates: workforce tightly linked to economic development and welfare
reform—States such as Michigan, Texas, and Utah are combing economic development,
employment services, welfare reform initiatives and employment and training into one agency
to oversee programs formally in multiple agencies.32 Other states–Oregon and Kentucky—are
creating policy councils to present a “unified voice” among programs to their governors and
legislatures. Public-private partnership is another approach to integration. Enterprise Florida,
for example, is an incorporated public/private partnership composed of business, government
and education sectors that has five affiliated partnerships dealing with: capital financing,
technology innovations, international trade, business development, and workforce
development. The workforce development affiliate works on One-Stop Career Centers,
Welfare-to-Work, School-to-Work, and High Skills/High Wages, which is “Florida’s strategy
for aligning education and training programs with occupational forecasting.”33
New Mantra: consolidation not proliferation—States are organizing themselves differently and
better for workforce purposes. Typically, they are restructuring the fragmented mix of
workforce programs and services, administered by a variety of agencies, into a more
streamlined, integrated system. The rationale is phrased nicely in a recent report by the
National Association of Private Industry Councils:
We have recently come to realize that we do not need more programs to make our
workforce development more effective. What we need is an employment and training
system, over and above the individual programs, that can look at (and understand)
all of these pieces, allocate resources according to an all-encompassing plan, and set
goals and evaluate the success or failure of the system as a whole rather than just its
individual parts.34
This reform, in other words, deals with changing the “how” of administering and
implementing workforce development programs and services.
New Tasks: getting the substance right—Another common reform focuses on “what” should
be the types and substance of programs and services to develop or enhance the workforce.
People in the workforce development arena are beginning to probe into questions like: What
type of education, employment and training is best for secondary students? Community
college students? University students? Dislocated workers? Welfare recipients? Professionals?
Are the services currently being provided effective? How could they be improved? In this area,
states are experimenting with at least two approaches to ensuring the “what” or substance is
right. They are designing more strategies for increasing employer involvement in and
ownership of workforce programs. And they are redefining the goals and increasing the use of
performance measures and accountability to shape program substance. Highlights of these two
approaches follow.
New Customer Sensitivity: making customers an integral part of workforce
development—Most states are still struggling with the tough questions about how to engage
the customers—employers, employees, students and communities—more directly and
14 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
proactively in the workforce development delivery system to narrow the gaps between public
education, training and employment services and employers needs, individuals needs, and
communities needs. They generally recognize now that customer involvement and ownership
is not a matter of adding representation on workforce development advisory boards and
commissions. Rather, it requires, according to one source, “a fundamental realignment of the
public and private responsibilities, and inventing new governance, organization, program and
financing strategies that support both public and private interests in different and more
effective ways.”35
Figure 3 presents one example of a workforce initiative in Silicon Valley, California that
tightly links employers to education and training programs as a means to influence the “what”
or substance of workforce development. Not surprisingly, this region has rallied companies,
schools, and government around a coherent workforce development model that has the
potential to deliver multiple short and long term benefits.
New goals: “getting the job” is only one part of the workforce challenge—“The traditional
focus, job placement, of workforce development efforts does not fully capture what employers,
individuals, and communities need from education and training systems in the 21st century,”
says a report by the National Governors’ Association.36 This organization is encouraging states
to adopt new goals that align better with various customer’s needs: “For employers, these new
systems must be far more effective than current ones at helping employers upgrade the skills of
workers to levels that will enable their firms to sustain high value-added jobs, to increase
productivity, and to adapt to rapid economic change. For individuals, new systems must focus
on assisting individuals to acquire sustainable employment and economic independence. This
includes providing employees with opportunities for on-going skill development and career
progression, including special efforts to ensure access, retention and advancement for those
most disadvantaged in the labor market.”37 For communities, these new systems need to
ensure that a community’s businesses and people have the knowledge and skills they need to
compete in a global economy.
Old Tactics, New Targets: using traditional business recruitment tools for workforce
recruitment—The labor market is getting so tight that some state and local economic
development groups are advertising and providing financial incentives to entice workers from
elsewhere to move to the area. For example, Michigan and Ohio recently launched
competing national advertising campaigns to lure workers to those states, where
unemployment is the lowest in nearly 30 years. And in February 1998, Michigan Governor
Engler announced a $50-million job-training plan for construction and technical jobs which
includes scholarships for up to 10,000 community college students, looking to get their
associate’s degree or certificates related to construction or technical jobs.38
Morrison Institute for Public Policy 15
Figure 3. Reform Silicon Valley-Style
Still in the prototype stage, the Silicon Valley Workforce Partnership is a regional
initiative that will attempt to take a comprehensive approach to workforce development
in Silicon Valley. The Partnership's mission is to affect a cultural change in how the
region grows its present and future workforce, as well as how it keeps the workforce
continuously up-to-date. Today, companies work sporadically with local education and
training organizations to focus on priority needs and address them. The Partnership
aims to secure tangible commitments from at least 2,000 companies over the next 5
years for specific workforce development projects. The cumulative effect of these
projects is to affect a cultural change that has a much broader, deeper, and longer-lasting
impact than current efforts.
To meet present workforce needs, the Partnership is organizing cluster teams that are
setting specific priorities to address immediate skilled labor shortages. For example, the
semiconductor/semiconductor equipment cluster has identified manufacturing
technicians as a priority-and is working with local community colleges to double their
enrollment by fall 1998. The information technology cluster will focus on their urgent
need for “certification ready” workers— with implementation to begin in 1999. Beginning
in 1999, an annual “regional workforce scan” will also be conducted to identify
immediate workforce needs, information that will be used to launch future targeted,
cluster-based education and training efforts. The overarching goal of these cluster
efforts is to increase the number of local graduates in specific, skill shortage areas.
To meet future workforce needs, the Partnership is working on a regional project that
will give every student in Silicon Valley an opportunity to experience an information age
career. The aim of the effort, currently dubbed the “Silicon Valley Game of Life,” is to
provide an exciting, engaging, technology-based simulation of career opportunities in
Silicon Valley. Students would simulate exploration of different careers and would be
supported by mentors, through internships, and other means to follow-through on their
interests. The overarching goal of the effort is to increase the percentage of local
students who progress into information age careers-be they engineering, marketing,
management, finance—in information age companies and clusters.
To help the workforce keep continuously up-to-date, the Partnership is working on an
electronic network of resources that help individuals embrace change in their work and
personal lives. Silicon Valley’s fast-paced environment continuously provides work-related
and life challenges to the workforce. The aim of this network, called the "Virtual
Neighborhood Network," is to help people connect to experts, organizations, and other
resources they can use for a range of needs—from skills upgrading to family needs.
The overarching goal of the effort is to create a regional focal point for individuals to
begin their search for assistance—one that will be responsible for helping large
numbers of Silicon Valley workers identify and use resources that, in turn, enable them
m keep pace at work and home.
The Partnership is currently designing prototypes in each of these areas, with an
expected implementation beginning during 1999.
Source: Collaborative Economics, 1998
16 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
New Depth to the “Pipeline”: paying attention to early childhood—Some states (and
businesses) are recognizing that nothing they hope to achieve in the areas of school reform or
building a better-skilled workforce will happen unless they start paying attention to early
childhood development. New “hard science”about how a child’s brain develops make it clear,
for example, that foreign languages should be taught in elementary school, if not before; that
remedial education may be more effective at the age of three or four than at nine or 10; and
that good, affordable day care is not a luxury or a fringe benefit for welfare mothers or working
parents but essential brain food for the next generation. To meet the early “pipeline”
challenges, states such as Colorado, North Carolina, and Oregon are beginning to regulate
and subsidize child care, provide home visits to help families with their first child, and provide
prekindergarten programs for low income children in such a way as to increase the likelihood
of good outcomes for children and, in turn, increase the likelihood of them being strong
members of the labor pool.39
What Arizona is Doing About Workforce Development
Arizona is currently focusing most of its efforts to revamp workforce development in three
areas:
< establish a new Governor’s Council on Workforce Development Policy and an Office of
Workforce Development Policy in the Arizona Department of Commerce to coordinate
the existing myriad of independent, overlapping programs, services, and funding sources;
< create a system that connects workforce development with economic development
activities; and
< create a system that tightly links industry to the design and ownership of workforce
programs and services.
The state just released for public review a draft comprehensive plan—Arizona’s Workforce
Development System Comprehensive Plan—that advances these three reforms.
The premise of the plan is that to the extent possible Arizona’s cluster-based economic
strategy should shape the state’s workforce development efforts. Known as ASPED, Arizona
Strategic Plan for Economic Development, the strategy was developed in 1992 through a
partnership of Arizona Department of Commerce, Greater Phoenix Economic Council,
Greater Tucson Economic Council and the Enterprise Network. In preparing the strategy, the
state took nearly a year to analyze its economy in a global context or, more specifically, to
understand which of its industries had the following characteristics:
< Export orientation: many of the companies in the industry sell products or services to
companies outside the region;
Morrison Institute for Public Policy 17
< Concentration: employment in the industry is more concentrated in the region than the
national average, and the industry is an existing or emerging area of specialization for the
area;
< Significant size or rapid growth: the industry is a significant size or, if new, has an above
average growth rate compared to that of the U.S. as a whole;
< Business interdependence: businesses relate to each other through the buyer-supplies
“food chain,” as competitors, or as partners.
Industries meeting these criteria are called clusters because they are geographical
concentrations of competitive firms in related industries that do business with each other and
that share needs for common talent, technology, and infrastructure. They are important to
identify and focus on because, as Harvard Business School Professor Michael Porter argues, in
advanced economies today, regional clusters of related industries, rather than individual
companies or single industries, are the source of jobs, income and export growth.40 Arizona
has ten so-called clusters driving its economy.
The state is in the process of structuring its workforce development system around the view
that clusters are the key customers. The draft plan states very clearly that “it is built on the
platform originally set forth in Arizona’s Strategic Plan for Economic Development” and that
the overarching purpose is to enhance the economic growth and competitiveness of Arizona’s
clusters by “developing the state’s human resources via improved information, education, and
training programs and services.”41 Specifically, the plan provides for forecasting worker
demand for Arizona’s clusters, identifying training programs that do not currently prepare
adults and youth for occupations in industry clusters, and integrating cluster-identified
occupational competencies into all training programs in the future.
More importantly, Arizona’s Workforce Development System Comprehensive Plan proposes a
process in which company human resource managers and others who represent a cluster (e.g.,
trade association representatives; university researchers) would be involved in
specifying–precisely–the academic and basic job-readiness skills required for top-projected jobs
in each cluster. The process, which is currently being pilot-tested in the Arizona High Tech
cluster, first has people in the industry identify projected labor needs in terms of specific
occupations, or job titles. Then, the question is asked: Who could fill these jobs? Or,
conversely, what is the level of education needed to fill these jobs? In this manner, entry-level
positions are defined which potentially could be filled by students exiting high schools,
community colleges, and universities. The second step in the process is to convene people
who perform the job, supervise the job, and train others to perform the job to quantify the
skills required in order to successfully perform it and, presumably, advance through the system
over time.
The state’s vision is that once this “competency analysis” is conducted for each cluster, the
information can be shared, at the very least, with workforce development program and service
providers to assist them to better prepare their clients to gain meaningful employment. At the
18 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
most prescriptive, the state could require publicly funded workforce development programs to
incorporate cluster-specific competency standards into their service repertoire.
Naaman Nickell, business columnist for the Arizona Republic, called the state’s plan “a solid
basis for following up on the recent Governor’s Summit on Workforce Development.”42 He
further notes that the plan “is going to take a lot of support, assistance and leadership from the
private sector—to say nothing of money....After all, the business community is going to
benefit most from a plan that guarantees an adequate supply of well-educated employees.”
GPEC’s Role in Workforce Development
Workforce development efforts are invariably more successful and sustainable when all the
people in a community have influence over policy formation, program and service
alternatives, and monitoring efforts for success. In other words, progress can be sustained only
when citizens, businesses, and all levels of government assume a role in making the hard
choices and providing resources to make workforce development successful. In this sense, the
Greater Phoenix Economic Council needs to figure out its role in meeting the universal
challenge of developing more and better workers in the Greater Phoenix region and in the
state. The ideas and examples that follow are intended to stimulate further discussion about
GPEC’s potential roles. They appear in no particular order of importance.
Among other things, GPEC could:
< Spearhead an initiative to establish for the first time a straight forward, data-driven
process to benchmark the results GPEC’s constituents (existing business as well as
potential relocates) expect from Arizona’s workforce pipeline, from preschool through post
graduate through retraining. The product could be an annual Workforce Report Card or
Workforce Index that would contain a number of indicators or quantitative measures to
tell the region how well various components of the workforce pipeline are doing, whether
we are going forward or backwards in meeting our workforce development challenges, and
how we stand in comparison to other states/regions. The types of data that could be
tracked include:
C statistics about the size and skills of the Greater Phoenix and Arizona labor
pool—e.g., international and domestic immigration, engineering degrees awarded,
number of those degrees that stay working in the state, advanced education level of
the workforce, eight grade math and science scores, corporate training dollars per
worker, Internet connectivity, classroom access to the Internet, pay per worker,
inventions and patent applications by Arizona firms—and
C outcome measures of specific education and training programs—e.g., retention rates,
wage advancement as well as job placement.
Underlying the call for a benchmarking system is an essential and sometimes overlooked
point: organizations and individuals are more likely to do that which they are asked to
measure and track. Thus, if through the Workforce Report Card or Index, the Valley
Morrison Institute for Public Policy 19
emphasizes post-placement support, retention and advancement, as well as job placement
and, in turn, treats workforce training, retention rates and wage advancement as measures
for success and conditions for receiving funds, the odds rise that Arizona’s workforce
training systems will start to show results in those areas.
The quid-pro-quo for education and training service providers is that they are involved
with businesses in the actual design of the performance measures and that businesses will
provide future support for public programs/policies which will enable the workforce
development system to achieve the results expected.
< Facilitate collective action among firms—bringing them together to do collectively what
they cannot do individually—to address specific workforce issues. Many of the firms that
downsized and specialized in pursuit of agility in a global economy are now finding they
must recombine in new ways to pursue joint solutions to common problems in developing
their present and future workforce. As one report explains, “inter-firm cooperation is
quickly becoming an important strategy for (1) upgrading the skills of current workers; (2)
attracting qualified new job entrants to positions with very high skill requirements; and,
(3) helping the poor and poorly prepared find family supporting jobs and move toward
economic independence.”43 However, many firms still find it difficult to establish
cooperatives because they require time and associative skills that are in rare supply
especially in smaller firms.
Ideas for how GPEC might take the lead to catalyze inter-firm cooperation include the
following:
C GPEC can help businesses in the region jointly explore the use of intermediary
organizations to provide post-employment support services to low-skill, entry-level
workers. Many small-and medium-sized firms have concerns about addressing the
problems of new workers who have very little work history and have serious and
distracting personal and family problems. Some large corporations are establishing
their own in-house post-employment programs. For example, Marriott International
Corporation has established the “work-life program” that provides a range of support
services including employability training classes, child care, counseling, and other
family support services.44 But small and medium-sized companies often do not have
the time and resources to invest in these types of activities or services and thus are
reluctant to hire disadvantaged individuals to meet their employee needs.
C At the GPEC Summit, Rob McCord suggested several ideas that would require
collaborative action to come to fruition. One is for Greater Phoenix to become a
Mecca for MADMUPS (Middle-Aged Downwardly Mobile Urban Professionals) who
want to “retread” into technology-oriented jobs and enjoy a great sunny lifestyle while
going through an affordable—and nationally advertised—training program.
< Work with the Arizona-Mexico Commission on a strategy to tap into the talent pool in
Sonora, Mexico. Currently, Sonora has an abundance of engineers that could provide a
limited source of potential employees for Arizona companies and, more importantly, could
be networked to provide outsourcing options for Arizona companies.
20 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
< Examine the feasibility of recasting a potion of GPEC’s highly successful marketing skills
and business recruitment experience to the task of recruiting skilled workers from
elsewhere to the region. Such a talent recruitment strategy might also focus on marketing
the region to a younger generation. For example, GPEC might experiment with placing
ads in key “Generation X” publications or adding-on events targeted to younger workers
or college students whenever the organization visits other cities for business recruitment
and marketing purposes.
< Sponsor a workforce “study trip” to both energize and educate key business and
community leaders around solutions found in other areas, e.g., Silicon Valley Workforce
Partnership. Similar study trips organized by the Morrison Institute to see how other
communities— Portland, Dallas, Los Angeles, San Diego—dealt with growth,
transportation, air quality, and inner-city issues have proved to be extremely effective
education tools and motivators of civic leadership as the participants apply the “lessons
learned” from the trips to solve similar problems in Arizona.
< Serve as the “bully-pulpit” to get state and local policy makers to recognize that Arizona is
growing a new economic base with an industry mix that is substantially different from the
economic base of our past and that our public policy must reflect the competitive
requirements that support the development and growth of globally competitive firms in
key industry clusters. Since first among the competitive requirements are intellectual
capital and excellent workers, GPEC can help policy makers recognize that an effective
workforce “pipeline” requires investment at every layer of the pipeline, not just a re-arrangement
of existing elements. More importantly, it takes time to come to fruition.
More specifically and immediately, GPEC can work with the Arizona Department of
Commerce to finalize and quickly implement the state’s new comprehensive workforce
development plan. It is also timely to weight in on the development of new standards for
school facilities under Students FIRST to ensure they align with what businesses know the
competitive requirements to be in a global economy.
< Sponsor with ASU a “skills scan” session with business representatives from a different
Arizona cluster each year. In coming together, businesses could scan their external and
internal business environment, begin to project future positions and skills, and forecast
future competency trends. Such an event would potentially benefit companies with no or
limited HR/ workforce forecasting and planning divisions and would also benefit
universities (e.g., engineering and business schools) that need up to seven years advance
notice to change curricula and get the first crop of newly trained students out the door.
Morrison Institute for Public Policy 21
Conclusion
The economic facts of life—technological advances, global competition, further company
downsizing—would appear to dictate continuous education and training in the workforce in
order to keep pace with the ever changing world and to enhance the ability of individuals to
contribute to the economy and society. Moreover, these economic trends indicate that quality
of intellectual capital will become even more of a competitive advantage than it is now for
regions competing against one another for a prominent place in a world economy. Taken
together, these developments have enormous implications for workforce development
strategies. It means significant weaknesses in the existing education and training systems, from
preschool through post-graduate, must be overcome. But it also means that regions will need
to find better ways to anticipate future workforce challenges (e.g., the changing nature of
work, increasing reliance on technology in nearly all industries, increasing threats to at-risk
child, youth and young adult populations being an integral part of future labor pools) and act
quickly to address them.
Appendix A
22 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
1. Rob McCord, “Cost of Capital is a Human One,” The Arizona Republic, 20 April 1998.
2. Paul Giblin, “Businesses Urged to Develop Plans to Improve Workforce,” Mesa Tribune, 22 April 1998.
3. Margaret Steen, “Labor Pains,” InfoWorld Electronic, February 23, 1998.
4. Amy Saltzman, “Making It in a Sizzling Economy,” U.S. News & World Report, June 12, 1997.
5. Glen Creno, “Top 100's Concern: Finding Employees,” The Arizona Republic, 17 May 1998.
6. Anthony P. Carnevale, Education and Training for America’s Workforce, (Washington DC: The Manufacturing
Institute, 1998).
7. These results are from public polling conducted by Morrison Institute for Public Policy and Wright Consulting,
Inc. as part of a longitudinal study on public opinions related to education and workforce/economic
development. Spring 1998 is the third year that the study has been conducted on behalf of the Arizona
Department of Commerce, Office of Workforce Development Policy, School To Work Division.
8. Samuel Greengard. 1998. “Gain the Edge in the Knowledge Race,” Workforce Online, 1998.
9. “Governor’s Workforce Development Summit Focuses on Challenges, Solutions,” Commerce Connections,
(Phoenix, AZ: Arizona Department of Commerce, Spring 1998).
10. “America’s Economic Growth Squeeze,” (a summary of Workforce cover story, “Economic Forces Are
Squeezing Growth Potential,” 77 (3):44-54), Workforce Online, http://www.
11. “High-Tech High,” The News Hour with Jim Lehrer transcript, July 6, 1998.
12. Samuel Greengard. 1998. “Economic Forces are Squeezing Growth Potential: But HR Can Unlock a Prosperous
Future,” Workforce, 77(3):44-45.
13. Ibid.
14. Carl W. Stenberg and William G. Colman, “General Deterrents to Future Labor Force Employability of
American Youth.” In American’s Future Work Force: A Health and Education Policy Issues Handbook (pp. 67-
108), Greenwood Press, 1994.
15. Ibid.
16. Samuel Greengard, “Occupied,” Workforce Online, 1998.
17. Collaborative Economics, “Linking the New Economy to the Livable Community,” Discussion Draft, March
1998.
18. Saltzman, Amy, op. cit.
19. Commerce Connections, op. cit.
20. John Greenwald, “Where the Jobs Are,” Time Magazine, January 20, 1997.
21. Donna G. Albrocht, “Reaching New Heights: Today’s Contract Workers Are Highly Promotable,” Workforce,
April 1998.
22. Greengard, op. cit.
23. Greengard, op. cit.
Endnotes
Morrison Institute for Public Policy 23
24. Karen Rayl, “GTE’s Training Goes High-Tech,” Workforce, April 1998.
25. Jennifer J. Laabs, “HR Institute Supports Bell Helicopters New Plant Operations,” Personal Journal, 72(5): 60-76,
1993.
26. Commerce Connections, op. cit.
27. The News Hour with Jim Lehrer, op. cit.
28. Shari Caudron, “Be Cool!” Workforce, April 1998 pp. 50-61.
29. Jill Hyland, “Meeting Employer Demands: Emerging State Practices in Workforce Development,” National
Governors’ Association, February 19, 1998.
30. Saltzman, op. cit.
31. Jill Engmark, and Linda Dickey, Arizona Employment Program Summary: 1997 Update, Tempe, AZ: Arizona
State University Morrison Institute for Public Policy, 1997.
32. J. Velde, and K. Kester, Building Systems: A Brief Report On The Changes On Other States’ Workforce
Development System, Olympia, WA: Workforce Training Education Coordination Board, 1998.
33. Ibid.
34. National Association of Private Industry Councils, “NAPICS’s Comprehensive Guide to Workforce
Development Boards,” Washington, D.C.: 1998.
35. “Demand Side Strategies for Workforce Development,” National Governors’ Association Center for Best
Practices, March 1997.
36. Ibid.
37. Ibid.
38. Steve Pardo, “Prosperity Creates An Unexpected Downside- A Labor Shortage,” The Detroit News, 3 February
1998.
39. J. Madelline Nash, “Fertile Minds,” Time Magazine, February 3, 1997.
40. Michael Porter, (1990). The Competitive Advantage of Nations, New York: The Free Press.
41. Arizona’s Workforce Development System Comprehensive Plan, Arizona Department of Commerce, Office of
Workforce development Policy, January 1998.
42. Nickell, Naaman, “Plan Targets Labor Force Ills in the State,” The Arizona Republic, 12 April 1998.
43. National Governors’ Association Center for Best Practices, op. cit.
44. Ibid.

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Morrison Institute for Public Policy
School of Public Affairs # College of Public Programs
Arizona State University
The Achilles Heel of
Future Economic Growth:
The Workforce Development Challenge
What Is It?
How Critical Is It?
Who’s Doing What to Address It?
Prepared by
Mary Jo Waits
and
Judith A. Vandegrift
for
Greater Phoenix Economic Council
Fall 1998
Morrison Institute for Public Policy 1
Introduction
Fierce competition for workers is one of the top issues today in Arizona. Many people may be
surprised to hear that anything related to the state’s economic situation is on a list of pressing
issues. Our economy is booming. The state is one of the country’s hottest job machines.
Unemployment is the lowest in two decades. Companies and people continue to move to
Arizona in record numbers. But now come signs of a new era; as Arizona’s economy is and
remains robust, the state is finding it difficult to supply workers in demand by industry.
< Newspapers carry up to 46 pages of help wanted ads with large sections devoted to health
care professionals, software engineers, and telemarketers.
< High technology companies such as Motorola and Intel report that they reject as many as
9 out of 10 job seekers for want of needed skills.
< Some companies have increased entry level wages by 50 percent to compete for
employees.
< Workforce problems are causing Arizona companies to decide not to expand locally and
some are even choosing to move elsewhere to find workers.
< Local firms are increasingly critical of economic development organizations for actively
courting and successfully recruiting new companies to the state which compete with them
for workers.
The results of the above factors is a new but deep threat to our economic future. Businesses’
inability to find and retain the workers they need, where they will need them, may in fact be
the spear that unexpectedly pierces the state’s prosperity.
Of course, Arizona does not stand alone. Wherever one goes in the United States, it is
impossible not to hear something about workforce development. From construction workers
to high-tech talent, there is a “squeeze.” One expert believes it is not hyperbole to say human
capital is “the next great American Deficit.”1
The fact that Arizona does not face this issue alone, however, does not lessen the importance
or urgency of addressing it. The workforce, its abilities and capabilities, is fast becoming the
most important competitive weapon in economic development. Many people share the
opinion that soon the key differentiator among states and cities may actually be who can
deliver the right people when and where industry needs them.
What is happening in Arizona’s economy is only beginning to dawn on most Arizonans. It is
hard to imagine that good news about the economy is bad news for workforce development.
Yet, the possibility of an “economic growth squeeze” and the need to address it soon have
never been more clear. This report is meant to provide both a basis for understanding the
2 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
scale and importance of the workforce development issue and a basis for shaping a response
vis-a-vis public policy, business practices and individual responsibility.
The need for such a document surfaced during the Greater Phoenix Economic Council’s
Economic Summit XII held April 21, 1998. The topic for discussion was the critical factors a
region needs to remain competitive in the global economy of the next century and how
Greater Phoenix ranks in those factors. The Summit’s 400 participants and panel of industry
experts not only reinforced the importance of workforce for competitive advantage but also
raised the need for a broader understanding of the issues, problems and solutions. GPEC, in
response, commissioned this report to serve as a starting point for productive dialogue and
concerted action. The report is not a labor forecast or tactical “how-to” guide on improving
the workforce in Arizona; these are the tasks of others. The intention of this report is to alert
all Arizonans that the workforce issue has a new urgency in the state, and that multiple
players have roles in addressing problems.
A Clear Message: Workforce is Critical
One newspaper reporter characterized the theme that emerged during GPEC’s Summit as
“Businesses are confronted with a dearth of skilled workers.”2 That message came in several
ways. Each of the speakers representing four of Arizona’s clusters—high technology,
bioindustry, software, environmental technology and food, fiber and natural products—
stressed the workforce challenge. Keynote speaker and futurist Rob McCord assured them that
their concern cuts across the entire county and that most thoughtful business leaders in
America now are justifiably alarmed about the availability of good, well-trained, well-motivated
and affordable people. The results of a survey conducted for the Summit bolstered
their observations. A quality workforce is the single most important factor for global
competitiveness, according to about 140 respondents to a one-page survey sent out with the
Summit invitations.
The survey asked key public, private, and non-profit leaders in the Greater Phoenix area to
rate nine factors in terms of importance for global competitiveness and to rank Greater
Phoenix on the same factors. The nine factors included: (1) workforce quality and quantity;
(2) accessibility to domestic and global markets; (3) taxes/regulatory environment; (4)
availability of capital; (5) real estate land and buildings; (6) technology R &D capacity and
university/industry technology transfer; (7) business incentives (tax and financial); (8)
public/private collaboration in addressing key community issues; and 9) pro-business
government leadership. Results of the surveys returned are presented graphically in Appendix
A and will be discussed throughout this report. Because of the small number of responses, the
survey cannot be considered “scientific,”nor can the results be considered “statistically
significant.” However, the responses do provide a snapshot of what business and community
leaders consider to be important in positioning businesses and the Greater Phoenix region
globally.
A second theme to emerge during the Summit was boldness and creativity. “Workforce
development is a large issue that demands a large solution,” said McCord. Indeed, one report,
Morrison Institute for Public Policy 3
according to McCord, suggests the country will need efforts on the scale of a new moon shot
to close our skills gap. At a minimum, it is going to take a whole new perspective on the
economy and new workforce tactics to outgrow the problem and flourish. On McCord’s list of
solutions are “aggressive reform of training and educational programs” and “large amounts of
cooperation among companies and between business and government.” Individual companies
cannot adequately address human capital problems and therefore need to consider innovative
partnerships. Public-private organizations like GPEC can help catalyze that cooperation, says
McCord.
A Quick Overview of the Issue
One of the challenges to addressing the workforce problem is a common understanding of the
issue. Is the human capital problem one of supply or skills? Is it an issue only for high tech
companies? What is industry’s role in workforce development verses government’s role?
Although the issue is complex and each community has unique challenges, this is essentially
the story:
< The workforce deficit is about quantity and it is about quality.
< It is an immediate problem; it is also a long-term problem.
< It is a threat to business competitiveness; it is a threat to Arizona’s competitive
advantage.
< It has industry doing cartwheels to find solutions; it has government standing on its
head.
The following sections provide more details on each of these points. The report then
concludes with a discussion of what Arizona is doing to address the issue and what GPEC
might do.
The Workforce Challenge Is about More and Better Employees
Today it is not absurd to say we have more jobs than people to fill them. GPEC Summit
speaker Rob McCord characterizes the quantity aspect of the problem this way: “We have too
many jobs which are out people hunting.” The situation is increasingly well-documented.
< The U.S. Department of Commerce recently released a report about the “national
shortage” of information technology workers. Most recently, the Information Technology
Association of America surveyed mid- and large-sized U.S. companies (100 plus
employees) and found that there are more than 340,000 unfilled information technology
jobs in the U.S.3
4 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
< Other reports remind us that the deficit clearly stretches well beyond the high-technology
industry. In a survey released by the American Management Association in April 1997,
nearly half of 400 human resources executives polled from mid-size to large companies said
skilled workers were scarce.4 What’s more, the end is nowhere in sight. Two thirds of the
executives in mining, manufacturing, construction, and business and professional services
predicted that the situation would intensify in the next three years.
< In compiling its 1998 list of Arizona’s top 100 businesses, the Arizona Republic found a
recurring theme—many of these companies are having problems finding employees and
some are disappointed in the quality of the applicants they are seeing.5
< The non-scientific survey for the GPEC Economic Summit shows 80 percent of the
business and community leaders polled believe workforce quantity is a very important or
important factor for success. Sixty-nine percent of the same group rated the Greater
Phoenix area’s performance on the factor as average or below average. Less than one-third
said the supply of workers in the region is excellent or very good.
But the problem goes well beyond sheer raw numbers. Rather, it centers on the skills that
potential employees bring to the table—or personal computer or assembly line—as job
applicants. Many students exit school without the skill sets required by business. Many adults
need training to gain entry into the workforce. Again, the problem is well documented
nationally and locally.
< The National Manufacturing Institute recently released its findings that 40 percent of all
17-year-olds lack requisite math skills and 60 percent do not have the necessary reading
skills to hold down a production job in manufacturing.6 The same study reveals that 60
percent of American workers indicated that they needed some form of training to qualify
for their jobs. An additional 40 percent said they need to upgrade their skills once on the
job.
< The GPEC Summit survey clearly shows that workforce quality is an extremely important
issue. The wake-up call, however, is that 70 percent of the respondents rated the region’s
competitiveness as measured by the availability of quality workers as average or below
average.
< Another Arizona survey indicates that over 80 percent of employers statewide say they are
having a hard time filling jobs with competent, well-trained people. And, 87 percent feel
that high school graduates are not being prepared for the jobs available.7
Taken together, these examinations of companies’ human resource needs make it clear that
the central workforce issue is developing “more and better” employees. However, there is yet
another dimension to the issue—timing. Throw in this factor and the challenge becomes
even more complex. It is, then, to supply enough workers with the “right” skills to meet
employers’ needs in a timely fashion.
Morrison Institute for Public Policy 5
Workers Are Needed Now, Tomorrow, Next Year, and Next Decade
Consider this story of the largest producer of semiconductor manufacturing systems in the
world, Applied Materials. This $3.1 billion Santa Clara, California firm is the archetypical
global company of the 1990s. It has enjoyed sales growth of nearly 40 percent a year for the
better part of the decade. That’s an enviable situation, to be sure. But these days, its growth
also presents more than a few headaches. For one thing, such growth means the company is
faced with the challenge of hiring approximately 300 new employees EVERY month.8 Every
unfilled job means thousands of dollars per year—or per week—in foregone profits. What’s
more, the end is nowhere in sight which means human resources managers have to make sure
there is a steady and ongoing supply of talent on a long-term basis.
The story is much the same in Arizona, although perhaps not as dramatic. Regardless of the
industry and the need—engineering, computer programing, telemarketing,
biotechnology—companies now are swamped with immediate recruitment and retention
problems. At the same time, they have to figure out what capabilities they need in the future
and put in place workforce delivery systems or pipelines to prevent an escalation of the
problem in the future.
In theory, the people delivery system is in place. Figure 1, although simplistic, depicts a
workforce “pipeline” insofar as there is a pool of potential employees to meet industry demands
in the immediate, short and long term future. It shows there is a pool of potential workers,
namely adults either in or able to enter the workforce, who presumably could meet industries’
immediate needs. In the short term, there is a supply of potential workers who will exit
community colleges or 4-year institutions with some postsecondary education and training.
And, there are K-12 students who are the workforce of the future.
Figure 1. Matching the Workforce Supply with Industry Demands
Workforce Supply Industry Demand
Un/underemployed
adults or adults
who need retraining
Immediate, or
short-term, needs
Community/4-year
college students
Intermediate needs
K-12 students Long term needs
6 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
In practice, however, the workforce pipeline in Arizona and elsewhere has serious glitches.
The glitches come from many areas, including demographics, business practices, education
policy, family situations and individual inertia.
< Shifting U.S. Demographics: As a result of the US birthrate, there are simply fewer people
entering the job market today. The bottom of the baby bust was 1975, meaning there is a
smaller pool of college graduates in the labor market now and going forward. At the same
time, the oldest baby boomers have already begun to retire and a larger wave will follow
over the next couple of decades. Arizona Public Service’s situation illustrates how a
company could be hit hard by the next wave: 83percent of the company’s workforce is
over the age of 40 and only 2 percent is under 30.9 There is evidence that many of these
“restless retirees”will stay in the workforce at least part-time. Still, unless the birthrate
changes or some other source of new workers emerges, the labor pool will continue to
shrink in the future.
< Business Practices: A relentless quest to downsize and cut costs in the late 1980s and
early 1990s led companies to layoff large numbers of workers. Next came re-engineering
when firms eliminated middle-management positions and production level workers and
decided instead to employ large numbers of temporary workers and “out-source” many
functions. In turn, this new reliance upon temporary workers and outsourcing led firms to
downplay in-house training and promotion plans. While these strategies had positive
results lowering costs, increasing profits, and providing more security for firms facing an
uncertain competitive environment, they stood certain nostrums, such as career ladders
and internal advancement, on their heads. For example, one result of “delayering” has
been less opportunity for entry level workers to move through company ranks, acquiring
new skills and experiences along the way, to fill job openings closer to the core workforce
of the employer. These business practices have, in effect, put glitches in companies
“internal” workforce pipelines.
< Public Policy: The most fundamental public policy impacting the supply of workers is, of
course, education. Unfortunately, nearly everyone agrees that many educational systems
are not preparing students for real jobs in today’s workforce. As Workforce magazine says,
“High schools and colleges are pumping out fewer and fewer students who have the skills
employers need. Many firms are having to train and re-train scores of workers—even
before formally hiring them—to ensure their people have the right skills for the jobs
available.”10
But this “layer” of the pipeline is also troubled by students’ unfamiliarity with various
industries, especially high tech. One high school student in Austin, Texas interviewed on
the News Hour with Jim Lehrer explains his reluctance, “no one in my family works in this
field, so I have no way of knowing really what they do…I don’t know if they’re actually
doing hard works, or brain busters or what.”11 Unfamiliarity, in turn, leads to concern
about being unsuccessful in the high tech field. On the same news show, a high school
teacher describes his challenges recruiting students to math and science classes: “When
we’re trying to recruit students for these hard classes, the first question they ask us: Is it
Morrison Institute for Public Policy 7
required for graduation? You say, no. The second question they ask us: Is it hard? And we
say, yes. The third question is: Why should I take it?”
Interestingly, 40 percent to 60 percent of all science students graduating from the U.S.
universities are now foreign born.12 This fact has not gone unnoticed and more and more
high tech firms are now looking for foreign brain power to fill their top engineers and
scientists positions. Scores of other companies are looking outside U.S. borders for
workers. But this “pipeline” is constrained by U.S. immigration policies that limit the
number of employment visas. According to one report, “In 1997, the limit of 65,000 visas
for skilled foreign workers was realized in early September, the earliest in decades.”13
< Family and Individual Responsibility: The reality is that the first responsibility to achieve
employability and productivity goals rests with the family and the individual. Families are
the most significant influence on the values, behavior, and learning of children and
youth. There is ample evidence, for example, that parents who are uncaring, abusive, or
who place a low value on educational achievement are threats to both the health and
education achievement of our future workforce.14 Much of the health habits and life-styles
(e.g., drugs and criminal activity) that prevent or lengthen the odds against youth being
able to complete high-school or other preparatory training schedule adequate to permit
them to enter the labor force arise initially from the failure of parents (and others) to
identify, educate, and treat the problem. These and other strong adverse family influences
(e.g., split families and teenage mothers) mean that from a fifth to a quarter of the below-
18 population, including especially large populations of black and Hispanic youth, are
vulnerable to varying degrees to unemployability or to work lives that produce far less
than optimal results.15
Moreover, as President Clinton says, “What you earn depends on what you learn.” And
any individual who does not take responsibility for development of his or her skills and
education credentials is vulnerable to a lower standard of living and future
unemployability. The skills required for present and future jobs are in a constant state of
flux and employees that do not keep their skills up to date are a drain on the labor pool
and a negative impact on company productivity. Still, many workers do not fully
appreciate the economic value of retraining or “life-long learning” for themselves and are
not actively pursuing their options.
Workforce Is Key for Business Competitiveness and Regional
Competitive Advantage
American companies today must compete not just with their domestic neighbors but
with companies far away as well. What gives one company a competitive advantage
over another? It’s people and the knowledge they possess.16
This statement by Workforce editor Samuel Greengard has the clear ring of basic common
sense. It is people that create new technologies, new products, new jobs, and new industries.
It is people and knowledge that drive innovation. And in the business world, survival has
been reduced to a simple creed: innovate or perish.
8 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
“People and the knowledge they possess”are not an important source of competitiveness for
only high tech companies. That is a common misunderstanding that needs to be quickly
corrected. They are the key to economic success in a wide variety of products and services,
from agriculture and apparel, to business services, retail, and software. “Just-in-time
agriculture” in California is an example of the power of knowledge and innovation for more
than high tech. According to Collaborative Economics, a Silicon Valley based consulting
firm, “California has remained on the competitive edge of agriculture by applying new
technology, improved growing methods and irrigation and innovative product marketing. In
the Salinas Valley outside Monterey, California, vegetable growers work with processors to
harvest fresh lettuce, tomatoes, and other produce from the fields, lightly pack them in
vacuum packed wrapping, and shipping them to supermarkets to be sold as pre-made bagged
salads. Because of the convenience and fresh quality, consumers are willing to pay a premium
for this ‘just-in-time agriculture’.”17
If it is true that people and knowledge are the keys to competitiveness, then this is now a very
important issue for states. By implication, those states that organize knowledge—research and
development activities, specialized workforces, and unique business infrastructure—to support
industry innovation and worker competence are most likely to have a competitive advantage
in capturing new economy growth and quality jobs.
More states, including Arizona, are beginning to recognize these as the prerequisites of good
economic health. Prior to the 1990s, however, the accepted wisdom was that economic
health could be attained by merely reducing the costs of doing business in a state—cutting
taxes, resisting higher wages, weakening or limiting regulation, and subsidizing land costs,
among other measures. But if the global economy, unprecedented economic boom, and labor
squeeze have revealed one thing, it is that economic expansion and profits are not predicated
only on low costs. An educated and skilled workforce and technological innovation are the
engines that drive the growth machine.
This is clearly the view held by most of the business and community leaders attending GPEC’s
12th Economic Summit. As discussed earlier, Summit activities included a survey that asked
people to rate nine factors in terms of importance for business global competitiveness.
According to roughly 140 key business and community leaders in Greater Phoenix:
< Workforce quality is the most important factor for global competitiveness;
< Technology and R&D capacity rank second behind workforce quality;
< Pro-business government, access to both global and domestic markets, workforce quantity,
and availability of capital are also considered important factors in global competitiveness;
< Factors considered least important for global competitiveness are: business incentives, real
estate (both buildings and land), taxes/regulatory environment, and public/private
collaboration on key issues.
Morrison Institute for Public Policy 9
Acknowledging the importance of these factors and actually making changes in public policy
and business practices to enhance them are two very different issues. The next section of this
report describes how businesses and states are addressing the workforce challenge.
Business Is Turning Cartwheels to Find Solutions
It should come as no surprise to anyone reading this report to this point that industry is taking
bold and creative steps—that is, “turning cartwheels”—to attract and retain workers today
and grow tomorrow’s workforce. The stakes are high, as the following examples of short and
long-term strategies from around the country convey.
< Bonuses—According to an April 23, 1997 US News & World Report cover story on the
workforce crisis, companies are using bonuses to entice everyone from software
programmers and MBAs to hamburger flippers and bicycle couriers.18 For example, one
manager of a Domino’s Pizza in Dallas offers $200 signing bonuses and health benefits to
attract delivery drivers. And according to the magazine, Ameritech, the
telecommunication company, gives up to $1,000 to employees who recommend
candidates who are subsequently hired. Arizona Public Service is so hard-pressed to find
information-technology workers that it is paying a $1,500 bonus to any current employee
who refers a qualified prospect that leads to a hiring.19
< Salary bidding wars—A common example: A Silicon Valley mechanical engineer laid off
by Genesis Technology in a downsizing move immediately found himself the focus of
company bidding wars that resulted in a new salary $12,000 over his old one. Many
companies are beefing up their profit-sharing and stock-purchase programs to entice
workers.20
< Raiding temporary agencies—The April 1998 issue of Workforce reports that more and
more companies are hiring directly from temporary help agencies—and paying fat
premiums to do so.21
< Recruiting abroad—High tech industry looking for engineers and scientists are taking
their search to other countries. Workforce Online reports: “Software producers like Oracle
and Sybase are employing programers from India. Semiconductor and hardware companies
such as Texas Instruments and Hewlett Packard are grabbing engineers from Taiwan and
Korea. And chemical companies and pharmaceuticals—from Eastman Chemicals and
Pfizer—are mining for chemists, biologists and physicists.”22
< Education/training incentives—To attract workers and keep them, more firms are paying
for community college, college and graduate degrees and even giving managers training
budgets. Boeing, for example, is attempting to boost hiring by providing paid-on-the-job
training. Applicants who meet certain criteria can receive three months’ paid training
and then decide whether they want to accept the job.23 With its “Lifelong Learning”
program, Boeing is providing existing workers unlimited tuition reimbursement for any
10 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
kind of education or training an employee desires. If an engineer decides to become a
medical doctor, Boeing will pay for the school. The thought is that by allowing employees
to engage in learning activities outside work, they will get more into the continuous work
mode at work as well.
< Melding training and technology—Companies that downsized, re-engineered, or merged
are turning to a technology-based approach to employee training as a means to keep costs
low and increase worker productivity. Lecturer courses are being replaced with distance
learning, interactive or linear video, computer-assisted programs and workbooks.24
< Training the unemployed and unskilled—Rather than engage in a bidding war for
assembly workers, Bell Helicopter decided to identify individuals collecting
unemployment insurance or who were in low paying, dead-end jobs and train them in
partnership with the community college. The company screened applicants, tested their
skills, designed special curriculum and set up new, nontraditional assembly teams to ensure
employee success. As a result, Bell reports a 78 percent drop in turnover and a 181
percent rise in productivity.25
< Apprenticeship programs—Tired of spending millions of dollars going East, recruiting and
moving people to work in Arizona, AlliedSignal recently established Workforce 2000, an
apprenticeship program to help meet its need for qualified machinists.26 Students recruited
from high schools and community colleges complete a four-year program combing
comprehensive shop theory and on-the-job training. Students completing the program
achieve certified journey status as well as a two-year Associate of Arts in Science degree.
< Industry “universities”—Some corporations start their own training universities. For
example, Motorola University, which has an annual budget of about $120 million, is a
corporate training and adult education facility designed to deliver a training curriculum to
Motorola’s more than 10,000 employees in the Phoenix region. Motorola University is
also partnering with ASU’s Colleges of Engineering and Business to offer a technology
MBA program.
< Partnering with local schools/community colleges—As a means to a workforce pipeline,
businesses are becoming partners with local schools to provide students and teachers with
hands-on experience in the world of work through school-to-work and related programs.
Similarly, businesses are working with education and training communities to develop
clear standards for what students and workers must know and be able to do to succeed in
the workplace and in their industries. In Greater Phoenix, for example, industry,
education, and economic development groups formed the Semiconductor
Industry/Education Partnership (SIEP) to increase the number of skilled technicians
available to the high-tech industry. Based on curriculum designed cooperatively with
high-tech industry and Maricopa Community Colleges, SIEP trains students in
semiconductor manufacturing, circuit design, and facilities maintenance. In Austin,
Texas, high tech firms are reaching out to the city’s teen-agers to develop into future
skilled workers.27 Their past efforts to recruit workers out-of-state did not pay off because
of the high costs of bringing them to the state and the rapid turn over once they got to
Morrison Institute for Public Policy 11
Texas. Thus, the companies partnered with the city, chamber of commerce, community
colleges and high schools to introduce high school kids to high tech careers.
< “Cultivating a cool culture”—According to Workforce magazine, many companies find
paychecks and benefits are not enough to attract and retain the right employees and
therefore are working on becoming “cool places to work”—that is, different, non-traditional,
cutting edge.28 This means causal dress, virtual teams, domestic-partner
benefits, flexible schedules and onsite daycare.
< Partnering with other firms—The Arizona Optics Industry Association, a group of 145
firms located primarily in Pima county, put assistants in eight local schools to promote
careers in science and also developed specialized technician curricula for community
colleges. The San Francisco Hotels Partnership Project operates a joint training project for
the employees of major hotels in the San Francisco area. Employees identified the core
skills to be emphasized in the training and helped select the instructors. Since the program
began in 1994, participating hotels have reported increases in customer satisfaction
ratings.29
< Other novel approaches—National media are reporting that the competition for workers
has inspired some recruiters to try unusual approaches.30 For example: Intel sent out a
mailer to 14,000 engineers, offering a seven-day trip for two to Hawaii to all who join the
firm. IBM set up a recruiting tent near sunbathers in Daytona Beach, Florida during spring
break. Cisco Systems, a computer networking company hiring employees at the rate of
1,200 a quarter, links its on line recruitment site to the home page for Dilbert, the comic-strip
much loved in San Francisco.
Government Is Standing on its Head to Find Solutions
The role of federal and state governments is fundamental in workforce development. The big
players are, of course, the service providers, including K-12 schools, community colleges,
universities, and public job training programs, and the funders and administrators. At the
federal level, there are some 15 agencies administering 163 workforce development programs.
In Arizona, there are a minimum of five agencies administering 34 such programs. Combined,
these programs provide about $180 million annually to train and upgrade the state’s
workforce. Monies are administered by the Governor’s Office, Arizona Department of
Commerce, Arizona Department of Economic Security, Arizona Department of Education,
Arizona Industrial Commission. Recently added to the mix are welfare-to-work administrators
and programs.31
So how are states approaching the challenge of developing more and better employees? For
years, states tackled workforce development through a wide collection of independent, often
identical services to respond to the needs of citizens and businesses as each individual agency
or program defined those needs. Not surprisingly, this approach received a lot of criticisms for
being fragmented, uncoordinated, unresponsive to business needs, and generally ineffective.
In response to these criticisms, states, one-by-one, have begun crafting a new approach to
12 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
workforce development that departs dramatically from the past. Essentially, states are
concluding that to really be of service to businesses and different populations they need to be
able to offer easily accessible, customized responses to expressed business and citizen needs,
not just to trot out a catalog of training programs and school systems that may or may not suit.
Figure 2 illustrates the new direction for workforce development. It is too soon to claim that
states have successfully overhauled their workforce development systems. While a growing
number can boast a number of important reforms—and however encouraging their
successes—the overall impact of the initiatives developed by even the most innovative and
aggressive states fall short of achieving impact appropriate to the challenge.
Figure 2. New Direction for Workforce Development
Current System New System
# Employer as critical observer/advisor # Employer as fully vested partner
# Government as presumptive provider # Government as catalyst for action and
change among employers
# Government as broker of public/private
partnerships
# Compliance-driven # Accountability for results
# Centralized decision-making
# Placement oriented
# Decentralized decision-making
# Concerned with job retention and
advancement
# School and classroom based # Work-centered
# Targeted primarily at the unemployed
and disadvantaged
# Universal, including incumbent workers
# Focused on entry-level skills # Focused on transferable skills and
portable credentials
# Works primarily with single employers # Works with networks of employers
grouped around similar and
complementary sectors
Source: National Governors’ Association, 1998.
Morrison Institute for Public Policy 13
Nevertheless, some promising, common components to state reform include:
New Teammates: workforce tightly linked to economic development and welfare
reform—States such as Michigan, Texas, and Utah are combing economic development,
employment services, welfare reform initiatives and employment and training into one agency
to oversee programs formally in multiple agencies.32 Other states–Oregon and Kentucky—are
creating policy councils to present a “unified voice” among programs to their governors and
legislatures. Public-private partnership is another approach to integration. Enterprise Florida,
for example, is an incorporated public/private partnership composed of business, government
and education sectors that has five affiliated partnerships dealing with: capital financing,
technology innovations, international trade, business development, and workforce
development. The workforce development affiliate works on One-Stop Career Centers,
Welfare-to-Work, School-to-Work, and High Skills/High Wages, which is “Florida’s strategy
for aligning education and training programs with occupational forecasting.”33
New Mantra: consolidation not proliferation—States are organizing themselves differently and
better for workforce purposes. Typically, they are restructuring the fragmented mix of
workforce programs and services, administered by a variety of agencies, into a more
streamlined, integrated system. The rationale is phrased nicely in a recent report by the
National Association of Private Industry Councils:
We have recently come to realize that we do not need more programs to make our
workforce development more effective. What we need is an employment and training
system, over and above the individual programs, that can look at (and understand)
all of these pieces, allocate resources according to an all-encompassing plan, and set
goals and evaluate the success or failure of the system as a whole rather than just its
individual parts.34
This reform, in other words, deals with changing the “how” of administering and
implementing workforce development programs and services.
New Tasks: getting the substance right—Another common reform focuses on “what” should
be the types and substance of programs and services to develop or enhance the workforce.
People in the workforce development arena are beginning to probe into questions like: What
type of education, employment and training is best for secondary students? Community
college students? University students? Dislocated workers? Welfare recipients? Professionals?
Are the services currently being provided effective? How could they be improved? In this area,
states are experimenting with at least two approaches to ensuring the “what” or substance is
right. They are designing more strategies for increasing employer involvement in and
ownership of workforce programs. And they are redefining the goals and increasing the use of
performance measures and accountability to shape program substance. Highlights of these two
approaches follow.
New Customer Sensitivity: making customers an integral part of workforce
development—Most states are still struggling with the tough questions about how to engage
the customers—employers, employees, students and communities—more directly and
14 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
proactively in the workforce development delivery system to narrow the gaps between public
education, training and employment services and employers needs, individuals needs, and
communities needs. They generally recognize now that customer involvement and ownership
is not a matter of adding representation on workforce development advisory boards and
commissions. Rather, it requires, according to one source, “a fundamental realignment of the
public and private responsibilities, and inventing new governance, organization, program and
financing strategies that support both public and private interests in different and more
effective ways.”35
Figure 3 presents one example of a workforce initiative in Silicon Valley, California that
tightly links employers to education and training programs as a means to influence the “what”
or substance of workforce development. Not surprisingly, this region has rallied companies,
schools, and government around a coherent workforce development model that has the
potential to deliver multiple short and long term benefits.
New goals: “getting the job” is only one part of the workforce challenge—“The traditional
focus, job placement, of workforce development efforts does not fully capture what employers,
individuals, and communities need from education and training systems in the 21st century,”
says a report by the National Governors’ Association.36 This organization is encouraging states
to adopt new goals that align better with various customer’s needs: “For employers, these new
systems must be far more effective than current ones at helping employers upgrade the skills of
workers to levels that will enable their firms to sustain high value-added jobs, to increase
productivity, and to adapt to rapid economic change. For individuals, new systems must focus
on assisting individuals to acquire sustainable employment and economic independence. This
includes providing employees with opportunities for on-going skill development and career
progression, including special efforts to ensure access, retention and advancement for those
most disadvantaged in the labor market.”37 For communities, these new systems need to
ensure that a community’s businesses and people have the knowledge and skills they need to
compete in a global economy.
Old Tactics, New Targets: using traditional business recruitment tools for workforce
recruitment—The labor market is getting so tight that some state and local economic
development groups are advertising and providing financial incentives to entice workers from
elsewhere to move to the area. For example, Michigan and Ohio recently launched
competing national advertising campaigns to lure workers to those states, where
unemployment is the lowest in nearly 30 years. And in February 1998, Michigan Governor
Engler announced a $50-million job-training plan for construction and technical jobs which
includes scholarships for up to 10,000 community college students, looking to get their
associate’s degree or certificates related to construction or technical jobs.38
Morrison Institute for Public Policy 15
Figure 3. Reform Silicon Valley-Style
Still in the prototype stage, the Silicon Valley Workforce Partnership is a regional
initiative that will attempt to take a comprehensive approach to workforce development
in Silicon Valley. The Partnership's mission is to affect a cultural change in how the
region grows its present and future workforce, as well as how it keeps the workforce
continuously up-to-date. Today, companies work sporadically with local education and
training organizations to focus on priority needs and address them. The Partnership
aims to secure tangible commitments from at least 2,000 companies over the next 5
years for specific workforce development projects. The cumulative effect of these
projects is to affect a cultural change that has a much broader, deeper, and longer-lasting
impact than current efforts.
To meet present workforce needs, the Partnership is organizing cluster teams that are
setting specific priorities to address immediate skilled labor shortages. For example, the
semiconductor/semiconductor equipment cluster has identified manufacturing
technicians as a priority-and is working with local community colleges to double their
enrollment by fall 1998. The information technology cluster will focus on their urgent
need for “certification ready” workers— with implementation to begin in 1999. Beginning
in 1999, an annual “regional workforce scan” will also be conducted to identify
immediate workforce needs, information that will be used to launch future targeted,
cluster-based education and training efforts. The overarching goal of these cluster
efforts is to increase the number of local graduates in specific, skill shortage areas.
To meet future workforce needs, the Partnership is working on a regional project that
will give every student in Silicon Valley an opportunity to experience an information age
career. The aim of the effort, currently dubbed the “Silicon Valley Game of Life,” is to
provide an exciting, engaging, technology-based simulation of career opportunities in
Silicon Valley. Students would simulate exploration of different careers and would be
supported by mentors, through internships, and other means to follow-through on their
interests. The overarching goal of the effort is to increase the percentage of local
students who progress into information age careers-be they engineering, marketing,
management, finance—in information age companies and clusters.
To help the workforce keep continuously up-to-date, the Partnership is working on an
electronic network of resources that help individuals embrace change in their work and
personal lives. Silicon Valley’s fast-paced environment continuously provides work-related
and life challenges to the workforce. The aim of this network, called the "Virtual
Neighborhood Network," is to help people connect to experts, organizations, and other
resources they can use for a range of needs—from skills upgrading to family needs.
The overarching goal of the effort is to create a regional focal point for individuals to
begin their search for assistance—one that will be responsible for helping large
numbers of Silicon Valley workers identify and use resources that, in turn, enable them
m keep pace at work and home.
The Partnership is currently designing prototypes in each of these areas, with an
expected implementation beginning during 1999.
Source: Collaborative Economics, 1998
16 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
New Depth to the “Pipeline”: paying attention to early childhood—Some states (and
businesses) are recognizing that nothing they hope to achieve in the areas of school reform or
building a better-skilled workforce will happen unless they start paying attention to early
childhood development. New “hard science”about how a child’s brain develops make it clear,
for example, that foreign languages should be taught in elementary school, if not before; that
remedial education may be more effective at the age of three or four than at nine or 10; and
that good, affordable day care is not a luxury or a fringe benefit for welfare mothers or working
parents but essential brain food for the next generation. To meet the early “pipeline”
challenges, states such as Colorado, North Carolina, and Oregon are beginning to regulate
and subsidize child care, provide home visits to help families with their first child, and provide
prekindergarten programs for low income children in such a way as to increase the likelihood
of good outcomes for children and, in turn, increase the likelihood of them being strong
members of the labor pool.39
What Arizona is Doing About Workforce Development
Arizona is currently focusing most of its efforts to revamp workforce development in three
areas:
< establish a new Governor’s Council on Workforce Development Policy and an Office of
Workforce Development Policy in the Arizona Department of Commerce to coordinate
the existing myriad of independent, overlapping programs, services, and funding sources;
< create a system that connects workforce development with economic development
activities; and
< create a system that tightly links industry to the design and ownership of workforce
programs and services.
The state just released for public review a draft comprehensive plan—Arizona’s Workforce
Development System Comprehensive Plan—that advances these three reforms.
The premise of the plan is that to the extent possible Arizona’s cluster-based economic
strategy should shape the state’s workforce development efforts. Known as ASPED, Arizona
Strategic Plan for Economic Development, the strategy was developed in 1992 through a
partnership of Arizona Department of Commerce, Greater Phoenix Economic Council,
Greater Tucson Economic Council and the Enterprise Network. In preparing the strategy, the
state took nearly a year to analyze its economy in a global context or, more specifically, to
understand which of its industries had the following characteristics:
< Export orientation: many of the companies in the industry sell products or services to
companies outside the region;
Morrison Institute for Public Policy 17
< Concentration: employment in the industry is more concentrated in the region than the
national average, and the industry is an existing or emerging area of specialization for the
area;
< Significant size or rapid growth: the industry is a significant size or, if new, has an above
average growth rate compared to that of the U.S. as a whole;
< Business interdependence: businesses relate to each other through the buyer-supplies
“food chain,” as competitors, or as partners.
Industries meeting these criteria are called clusters because they are geographical
concentrations of competitive firms in related industries that do business with each other and
that share needs for common talent, technology, and infrastructure. They are important to
identify and focus on because, as Harvard Business School Professor Michael Porter argues, in
advanced economies today, regional clusters of related industries, rather than individual
companies or single industries, are the source of jobs, income and export growth.40 Arizona
has ten so-called clusters driving its economy.
The state is in the process of structuring its workforce development system around the view
that clusters are the key customers. The draft plan states very clearly that “it is built on the
platform originally set forth in Arizona’s Strategic Plan for Economic Development” and that
the overarching purpose is to enhance the economic growth and competitiveness of Arizona’s
clusters by “developing the state’s human resources via improved information, education, and
training programs and services.”41 Specifically, the plan provides for forecasting worker
demand for Arizona’s clusters, identifying training programs that do not currently prepare
adults and youth for occupations in industry clusters, and integrating cluster-identified
occupational competencies into all training programs in the future.
More importantly, Arizona’s Workforce Development System Comprehensive Plan proposes a
process in which company human resource managers and others who represent a cluster (e.g.,
trade association representatives; university researchers) would be involved in
specifying–precisely–the academic and basic job-readiness skills required for top-projected jobs
in each cluster. The process, which is currently being pilot-tested in the Arizona High Tech
cluster, first has people in the industry identify projected labor needs in terms of specific
occupations, or job titles. Then, the question is asked: Who could fill these jobs? Or,
conversely, what is the level of education needed to fill these jobs? In this manner, entry-level
positions are defined which potentially could be filled by students exiting high schools,
community colleges, and universities. The second step in the process is to convene people
who perform the job, supervise the job, and train others to perform the job to quantify the
skills required in order to successfully perform it and, presumably, advance through the system
over time.
The state’s vision is that once this “competency analysis” is conducted for each cluster, the
information can be shared, at the very least, with workforce development program and service
providers to assist them to better prepare their clients to gain meaningful employment. At the
18 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
most prescriptive, the state could require publicly funded workforce development programs to
incorporate cluster-specific competency standards into their service repertoire.
Naaman Nickell, business columnist for the Arizona Republic, called the state’s plan “a solid
basis for following up on the recent Governor’s Summit on Workforce Development.”42 He
further notes that the plan “is going to take a lot of support, assistance and leadership from the
private sector—to say nothing of money....After all, the business community is going to
benefit most from a plan that guarantees an adequate supply of well-educated employees.”
GPEC’s Role in Workforce Development
Workforce development efforts are invariably more successful and sustainable when all the
people in a community have influence over policy formation, program and service
alternatives, and monitoring efforts for success. In other words, progress can be sustained only
when citizens, businesses, and all levels of government assume a role in making the hard
choices and providing resources to make workforce development successful. In this sense, the
Greater Phoenix Economic Council needs to figure out its role in meeting the universal
challenge of developing more and better workers in the Greater Phoenix region and in the
state. The ideas and examples that follow are intended to stimulate further discussion about
GPEC’s potential roles. They appear in no particular order of importance.
Among other things, GPEC could:
< Spearhead an initiative to establish for the first time a straight forward, data-driven
process to benchmark the results GPEC’s constituents (existing business as well as
potential relocates) expect from Arizona’s workforce pipeline, from preschool through post
graduate through retraining. The product could be an annual Workforce Report Card or
Workforce Index that would contain a number of indicators or quantitative measures to
tell the region how well various components of the workforce pipeline are doing, whether
we are going forward or backwards in meeting our workforce development challenges, and
how we stand in comparison to other states/regions. The types of data that could be
tracked include:
C statistics about the size and skills of the Greater Phoenix and Arizona labor
pool—e.g., international and domestic immigration, engineering degrees awarded,
number of those degrees that stay working in the state, advanced education level of
the workforce, eight grade math and science scores, corporate training dollars per
worker, Internet connectivity, classroom access to the Internet, pay per worker,
inventions and patent applications by Arizona firms—and
C outcome measures of specific education and training programs—e.g., retention rates,
wage advancement as well as job placement.
Underlying the call for a benchmarking system is an essential and sometimes overlooked
point: organizations and individuals are more likely to do that which they are asked to
measure and track. Thus, if through the Workforce Report Card or Index, the Valley
Morrison Institute for Public Policy 19
emphasizes post-placement support, retention and advancement, as well as job placement
and, in turn, treats workforce training, retention rates and wage advancement as measures
for success and conditions for receiving funds, the odds rise that Arizona’s workforce
training systems will start to show results in those areas.
The quid-pro-quo for education and training service providers is that they are involved
with businesses in the actual design of the performance measures and that businesses will
provide future support for public programs/policies which will enable the workforce
development system to achieve the results expected.
< Facilitate collective action among firms—bringing them together to do collectively what
they cannot do individually—to address specific workforce issues. Many of the firms that
downsized and specialized in pursuit of agility in a global economy are now finding they
must recombine in new ways to pursue joint solutions to common problems in developing
their present and future workforce. As one report explains, “inter-firm cooperation is
quickly becoming an important strategy for (1) upgrading the skills of current workers; (2)
attracting qualified new job entrants to positions with very high skill requirements; and,
(3) helping the poor and poorly prepared find family supporting jobs and move toward
economic independence.”43 However, many firms still find it difficult to establish
cooperatives because they require time and associative skills that are in rare supply
especially in smaller firms.
Ideas for how GPEC might take the lead to catalyze inter-firm cooperation include the
following:
C GPEC can help businesses in the region jointly explore the use of intermediary
organizations to provide post-employment support services to low-skill, entry-level
workers. Many small-and medium-sized firms have concerns about addressing the
problems of new workers who have very little work history and have serious and
distracting personal and family problems. Some large corporations are establishing
their own in-house post-employment programs. For example, Marriott International
Corporation has established the “work-life program” that provides a range of support
services including employability training classes, child care, counseling, and other
family support services.44 But small and medium-sized companies often do not have
the time and resources to invest in these types of activities or services and thus are
reluctant to hire disadvantaged individuals to meet their employee needs.
C At the GPEC Summit, Rob McCord suggested several ideas that would require
collaborative action to come to fruition. One is for Greater Phoenix to become a
Mecca for MADMUPS (Middle-Aged Downwardly Mobile Urban Professionals) who
want to “retread” into technology-oriented jobs and enjoy a great sunny lifestyle while
going through an affordable—and nationally advertised—training program.
< Work with the Arizona-Mexico Commission on a strategy to tap into the talent pool in
Sonora, Mexico. Currently, Sonora has an abundance of engineers that could provide a
limited source of potential employees for Arizona companies and, more importantly, could
be networked to provide outsourcing options for Arizona companies.
20 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
< Examine the feasibility of recasting a potion of GPEC’s highly successful marketing skills
and business recruitment experience to the task of recruiting skilled workers from
elsewhere to the region. Such a talent recruitment strategy might also focus on marketing
the region to a younger generation. For example, GPEC might experiment with placing
ads in key “Generation X” publications or adding-on events targeted to younger workers
or college students whenever the organization visits other cities for business recruitment
and marketing purposes.
< Sponsor a workforce “study trip” to both energize and educate key business and
community leaders around solutions found in other areas, e.g., Silicon Valley Workforce
Partnership. Similar study trips organized by the Morrison Institute to see how other
communities— Portland, Dallas, Los Angeles, San Diego—dealt with growth,
transportation, air quality, and inner-city issues have proved to be extremely effective
education tools and motivators of civic leadership as the participants apply the “lessons
learned” from the trips to solve similar problems in Arizona.
< Serve as the “bully-pulpit” to get state and local policy makers to recognize that Arizona is
growing a new economic base with an industry mix that is substantially different from the
economic base of our past and that our public policy must reflect the competitive
requirements that support the development and growth of globally competitive firms in
key industry clusters. Since first among the competitive requirements are intellectual
capital and excellent workers, GPEC can help policy makers recognize that an effective
workforce “pipeline” requires investment at every layer of the pipeline, not just a re-arrangement
of existing elements. More importantly, it takes time to come to fruition.
More specifically and immediately, GPEC can work with the Arizona Department of
Commerce to finalize and quickly implement the state’s new comprehensive workforce
development plan. It is also timely to weight in on the development of new standards for
school facilities under Students FIRST to ensure they align with what businesses know the
competitive requirements to be in a global economy.
< Sponsor with ASU a “skills scan” session with business representatives from a different
Arizona cluster each year. In coming together, businesses could scan their external and
internal business environment, begin to project future positions and skills, and forecast
future competency trends. Such an event would potentially benefit companies with no or
limited HR/ workforce forecasting and planning divisions and would also benefit
universities (e.g., engineering and business schools) that need up to seven years advance
notice to change curricula and get the first crop of newly trained students out the door.
Morrison Institute for Public Policy 21
Conclusion
The economic facts of life—technological advances, global competition, further company
downsizing—would appear to dictate continuous education and training in the workforce in
order to keep pace with the ever changing world and to enhance the ability of individuals to
contribute to the economy and society. Moreover, these economic trends indicate that quality
of intellectual capital will become even more of a competitive advantage than it is now for
regions competing against one another for a prominent place in a world economy. Taken
together, these developments have enormous implications for workforce development
strategies. It means significant weaknesses in the existing education and training systems, from
preschool through post-graduate, must be overcome. But it also means that regions will need
to find better ways to anticipate future workforce challenges (e.g., the changing nature of
work, increasing reliance on technology in nearly all industries, increasing threats to at-risk
child, youth and young adult populations being an integral part of future labor pools) and act
quickly to address them.
Appendix A
22 The Achilles Heel of Future Economic Growth: The Workforce Development Challenge
1. Rob McCord, “Cost of Capital is a Human One,” The Arizona Republic, 20 April 1998.
2. Paul Giblin, “Businesses Urged to Develop Plans to Improve Workforce,” Mesa Tribune, 22 April 1998.
3. Margaret Steen, “Labor Pains,” InfoWorld Electronic, February 23, 1998.
4. Amy Saltzman, “Making It in a Sizzling Economy,” U.S. News & World Report, June 12, 1997.
5. Glen Creno, “Top 100's Concern: Finding Employees,” The Arizona Republic, 17 May 1998.
6. Anthony P. Carnevale, Education and Training for America’s Workforce, (Washington DC: The Manufacturing
Institute, 1998).
7. These results are from public polling conducted by Morrison Institute for Public Policy and Wright Consulting,
Inc. as part of a longitudinal study on public opinions related to education and workforce/economic
development. Spring 1998 is the third year that the study has been conducted on behalf of the Arizona
Department of Commerce, Office of Workforce Development Policy, School To Work Division.
8. Samuel Greengard. 1998. “Gain the Edge in the Knowledge Race,” Workforce Online, 1998.
9. “Governor’s Workforce Development Summit Focuses on Challenges, Solutions,” Commerce Connections,
(Phoenix, AZ: Arizona Department of Commerce, Spring 1998).
10. “America’s Economic Growth Squeeze,” (a summary of Workforce cover story, “Economic Forces Are
Squeezing Growth Potential,” 77 (3):44-54), Workforce Online, http://www.
11. “High-Tech High,” The News Hour with Jim Lehrer transcript, July 6, 1998.
12. Samuel Greengard. 1998. “Economic Forces are Squeezing Growth Potential: But HR Can Unlock a Prosperous
Future,” Workforce, 77(3):44-45.
13. Ibid.
14. Carl W. Stenberg and William G. Colman, “General Deterrents to Future Labor Force Employability of
American Youth.” In American’s Future Work Force: A Health and Education Policy Issues Handbook (pp. 67-
108), Greenwood Press, 1994.
15. Ibid.
16. Samuel Greengard, “Occupied,” Workforce Online, 1998.
17. Collaborative Economics, “Linking the New Economy to the Livable Community,” Discussion Draft, March
1998.
18. Saltzman, Amy, op. cit.
19. Commerce Connections, op. cit.
20. John Greenwald, “Where the Jobs Are,” Time Magazine, January 20, 1997.
21. Donna G. Albrocht, “Reaching New Heights: Today’s Contract Workers Are Highly Promotable,” Workforce,
April 1998.
22. Greengard, op. cit.
23. Greengard, op. cit.
Endnotes
Morrison Institute for Public Policy 23
24. Karen Rayl, “GTE’s Training Goes High-Tech,” Workforce, April 1998.
25. Jennifer J. Laabs, “HR Institute Supports Bell Helicopters New Plant Operations,” Personal Journal, 72(5): 60-76,
1993.
26. Commerce Connections, op. cit.
27. The News Hour with Jim Lehrer, op. cit.
28. Shari Caudron, “Be Cool!” Workforce, April 1998 pp. 50-61.
29. Jill Hyland, “Meeting Employer Demands: Emerging State Practices in Workforce Development,” National
Governors’ Association, February 19, 1998.
30. Saltzman, op. cit.
31. Jill Engmark, and Linda Dickey, Arizona Employment Program Summary: 1997 Update, Tempe, AZ: Arizona
State University Morrison Institute for Public Policy, 1997.
32. J. Velde, and K. Kester, Building Systems: A Brief Report On The Changes On Other States’ Workforce
Development System, Olympia, WA: Workforce Training Education Coordination Board, 1998.
33. Ibid.
34. National Association of Private Industry Councils, “NAPICS’s Comprehensive Guide to Workforce
Development Boards,” Washington, D.C.: 1998.
35. “Demand Side Strategies for Workforce Development,” National Governors’ Association Center for Best
Practices, March 1997.
36. Ibid.
37. Ibid.
38. Steve Pardo, “Prosperity Creates An Unexpected Downside- A Labor Shortage,” The Detroit News, 3 February
1998.
39. J. Madelline Nash, “Fertile Minds,” Time Magazine, February 3, 1997.
40. Michael Porter, (1990). The Competitive Advantage of Nations, New York: The Free Press.
41. Arizona’s Workforce Development System Comprehensive Plan, Arizona Department of Commerce, Office of
Workforce development Policy, January 1998.
42. Nickell, Naaman, “Plan Targets Labor Force Ills in the State,” The Arizona Republic, 12 April 1998.
43. National Governors’ Association Center for Best Practices, op. cit.
44. Ibid.